Court Dismisses Claims of Slave Laborers

By ADAM LIPTAK

Published: January 22, 2003

People forced to work as slave laborers for Japanese and German corporations in World War II may not sue for wages and injuries, the federal appeals court in San Francisco ruled yesterday.

The court struck down a law enacted by the California Legislature in 1999 that allowed such suits. The court said the law was an impermissible intrusion on "the federal government's exclusive power to make and resolve war."

The court also dismissed claims by the slave laborers on other theories, saying the statute of limitations barred them. That ruling is quite likely to be invoked in pending and anticipated suits that seek reparations against people who profited from slavery in the United States.

Judge Stephen Reinhardt, writing for a unanimous three-judge panel of the United States Court of Appeals for the Ninth Circuit, said he had reached those conclusions reluctantly. Judge Reinhardt described the "terrible abuses that German and Japanese corporate interests inflicted both on civilians and on soldiers captured by German and Japanese military forces."

A plaintiff, James O. King, was a marine who was forced to work for 44 months in a Japanese steel mill after having been captured on Wake Island. In an interview yesterday, Mr. King described those conditions. His job, he said, was "sledgehammer swinger." He worked 10 to 14 hours a day every day of the week.

"We performed labor without compensation," he said. "We didn't even have the food necessary to perform the labor. People died."

Mr. King, 81, recalled that he and 1,500 other prisoners were given a teacup of rice twice a day and a thin broth of weeds, bugs and the occasional baby mouse in the evenings.

The California statute would have allowed many thousands of people who performed slave labor, and their heirs, to sue those businesses and their successors or affiliates for wages, interest and injuries. The law applied to all forced labor from 1929 to 1945 in territory occupied by the Nazis, their allies and sympathizers.

The law extended the statute of limitations to the end of 2010. The appeals concerned 29 consolidated suits, one against German companies and the rest against Japanese businesses.

The federal government supported the defendants.

"California is plainly of the view that Japanese companies' use of unpaid forced labor, even if condoned by the Imperial Japanese government, violated principles of international human rights law," the government wrote in its brief. "But under our constitutional scheme, only the federal government has the authority to prescribe penalties for foreign violations of international law."

"A state legislature," the brief continued, "is in a poor position to assess what risks to our relations with Germany and Japan are entailed by a statute that aims to redress the wrongs of World War II or to weigh those risks against other foreign policy objectives that depend on the good will of those governments."

In 2001, another panel of the same court upheld a similar California law that required insurance companies to disclose information about policies that they and affiliated companies sold in Europe that were in effect from 1920 to 1945. The United States Supreme Court agreed to hear an appeal from that decision this month.

Yesterday, the Ninth Circuit panel distinguished the insurance case on the ground that it concerned commerce rather than foreign affairs and because it was not directed at any particular country.

The slave labor law, by contrast, Judge Reinhardt wrote, "seeks to redress wrongs committed in the course of World War II."

"California was dissatisfied with how the federal government chose to address the various wartime injuries suffered by victims of the Nazis and their allies after the United States brought the Second World War to a close," he wrote.

But states are not free to make such judgments, he concluded.

Last week, in a decision not mentioned by the Ninth Circuit, a state appeals court in Los Angeles upheld the statute. That court ruled that the Legislature had done nothing more than extend the statute of limitations, which states are free to do. That did not, the Los Angeles court held, interfere with the federal government's powers over foreign affairs.

Nate G. Kraut, a lawyer for a plaintiff, said his client intended to ask the entire Ninth Circuit to review the panel's decision based on the state court decision.

Peter J. Spiro, a professor of law at Hofstra University, said the federal, and not the state appeals court, followed Supreme Court precedent. That precedent, Professor Spiro said, may be operating from obsolete premises.

"Germany and Japan may be upset about California's slave labor law," he said. "But it's something we can handle, and doesn't really have a serious downside risk. That's the new world, one in which states do and should be permitted more discretion in the international sphere.

Harold Hongju Koh, a professor at the Yale Law School and a State Department official in the Clinton administration, agreed that states should have a role in assuring international human rights.

"Corporations should not be able to have continuing benefits with respect to their in-state activities from their human rights abuses," Professor Koh said.

The plaintiffs also sued on theories unrelated to the California statute. The court dismissed all those claims on the grounds of the statute of limitations. The claims were, the court held, "stale for several decades" and filed "far too late."

That ruling, Professor Spiro said, does not bode well for what he called "trans-historical claims" that involve the slavery of African-Americans in the United States.

"Can you go so far back to remedy conduct which is no longer considered not just wrong, but heinous?" he asked. "The answer appears to be no."

Daniel C. Girard, who represents Mr. King, the former marine, said the case was not only about the law.

"It's not unusual that you see a demand for payment that isn't legally enforceable," Mr. Girard said. "But the demand stands. If the position of the Japanese companies involved is that they refuse to consider the demand for compensation and stand on legal defenses, the moral consequences are what they are."